People v. Massey

• Decision Date: 11 June 1957
• Docket Number: Cr. 5407
• Citation: 312 P.2d 365,151 Cal.App.2d 623
• Court: California Court of Appeals Court of Appeals
• Parties: The PEOPLE of the State of California, Plaintiff and Respondent, v. Lloyd R. MASSEY et al., Defendants, Thomas Reynolds, Appellant.

Page 365

312 P.2d 365

151 Cal.App.2d 623

The PEOPLE of the State of California, Plaintiff and Respondent, v. Lloyd R. MASSEY et al., Defendants, Thomas Reynolds, Appellant.

Cr. 5407.

District Court of Appeal, Second District, Division 1, California.

June 11, 1957.

Rehearing Denied July 10, 1957.

Hearing Denied Aug. 8, 1957.

Isaac Pacht, Grant B. Cooper, Louis Miller, Los Angeles, for appellant.

Edmund G. Brown, Atty. Gen., Clarence A. Linn, Asst. Atty. Gen., Raymond M. Momboisse, Deputy Atty. Gen., S. Ernest Roll, Dist. Atty., Joseph L. Carr and Joseph P. Busch, Deputy Dist. Attys., Los Angeles, for respondent.

WHITE, Presiding Justice.

In an indictment returned by the Grand Jury of Los Angeles County, defendants were accused of the crime of Grand Theft, a felony, in violation of Penal Code, Section 487, Subd. 1, allegedly committed on or about July 17, 1953.

Following the entry of a plea of not guilty by both defendants, trial by jury was duly waived and the cause proceeded to trial before the court resulting in the conviction of both defendants of the crime charged against them. Motions for a new trial were denied and defendants were sentenced to serve a term of one year in the county jail. Execution of sentence as to each defendant was suspended, and conditional probation granted. From the judgment of conviction and the order denying motions for a new trial each defendant gave notice of appeal. Subsequently, at the request of counsel for defendant Massey, his appeal was dismissed, and we are here concerned only with the appeal of defendant Reynolds.

Consideration of the appeal of defendant Reynolds (hereinafter referred to as appellant) will be facilitated by here setting forth the names and connection of those mentioned in the narrative of the background surrounding this prosecution, and about to be unfolded.

Appellant Thomas Reynolds is an attorney at alw, and a member of the firm of Reynolds, Painter & Cherniss, with offices in Los Angeles. At the time of the trial Reynolds had practiced his profession for thirty-three years, and there was testimony that he enjoyed the reputation of being a capable practitioner. At the time of the transaction here involved, appellant's law firm was from time to time the attorney for the United Savings & Loan Association, defendant Massey and for the Anderson Estate, all to be hereinafter referred to.

Defendant Massey is also an attorney at law and engaged actively in that profession until 1945 when he organized United Savings & Loan Association, (hereinafter referred to as 'United') and of which he became President, Manager and Chairman of the Board of Directors, offices which he occupied until September, 1953 when the controlling stock interest was sold by him and other shareholders to La Mirada Rental Co., a partnership composed of Harold L. Shaw, his wife Martha J. Shaw and John Moore Robinson.

Of the 750 authorized and outstanding guaranty shares of United, Massey owned 154 in 1952. In May, 1953, he acquired 3 additional shares from a stockholder, Mary Kondeff, and on July 6th purchased 46 shares from his mother, making a total of 203 shares which he owned prior to July 17th. The remaining shares were distributed among the directors and various stockholders of United.

Affiliated with the business of United, but separate and distinct entities were United Mortgage Corporation and Valley Insurance Agency--activities in which Massey was profitably engaged and which were referred to at the trial as the 'fringe benefits.'

United Mortgage Corporation was engaged in the business of servicing Veterans Administration loans, making collections disbursing taxes and conducting escrows. Massey owned slightly less than one-half of its shares.

Valley Insurance Agency was a sole proprietorship owned by Massey and engaged in the business of insurance broker. This organization wrote fire insurance policies for dwellings upon which United had made home loans.

The Anderson Family:

Charles A. Anderson was a resident of Los Angeles for many years. He and his predeceased wife Emma owned as joint tenants 110 shares of United purchased by them in 1945 and 1949. Anderson died intestate on September 18, 1952 and it was from his estate that the theft of 110 shares of stock was charged. At the time of his death and for approximately a year prior thereto, Anderson was the administrator of the estate of his deceased wife and appellant Reynolds was his attorney.

Mrs. Helen Schwartz was Mr. Anderson's sister. She was a resident of Springfield, Ohio, having lived there nearly all of her life. She had never lived in California. She became administrix of the Anderson Estate.

Harold L. Shaw was a contractor, and as heretofore mentioned, a partner in La Mirada Rental Co., which in September, 1953, purchased controlling stock interest in United.

John Moore Robinson was also a partner in La Mirada Rental Co. and counsel for Mr. Shaw.

Julia Robertson Cook, also known as Julia Robertson, was a successful mortgage loan broker who had known defendant Massey for several years and who had done business with United, securing customers for its real estate loans from 1949 to 1951. Since 1951 Mrs. Cook had acted as a representative for Harold L. Shaw. She knew defendant Massey and had secured several building and construction loans from United in connection with Shaw's business. As the factual background herein is revealed it will appear that she was active in the negotiations between defendant Massey and the Shaw group for the sale of a controlling interest in United.

The trial was a prolonged one and from a careful examination of the lengthy reporter's transcript and aided by the exhaustive briefs filed herein, we regard the following as a fair epitome of the evidence vital to a determination of the issues presented on this appeal.

The record reflects that on June 10, 1952, Donald Metz, accompanied by his attorney Alfred Gitelson, conferred with appellant and defendant Massey concerning the possible purchase of United. The conference took place at appellant's office. Defendant Massey represented that he controlled a large portion of the stock and could persuade the other shareholders to sell. The price suggested by defendant Massey was in excess of $2,000.00 per share, provided defendant Massey would retain certain appurtenances of the business, to-wit, United Mortgage Corporation and Valley Insurance Agency, referred to at the trial as 'fringe benefits'. Mr. Metz testified, 'that immediately upon hearing the price I for myself and the other people whom I represented lost interest in the purchase because the price was so high'. This witness further testified that 'being in the mortgage business and insurance business myself, I feel--it was my opinion and still is that those two items are one of the most valuable assets of any association like the association in question.'

In June or July, 1952, Sidney M. Taper, a land developer and mortgage banker who was not acquainted with but knew of defendant Massey, called on the latter and after discussing financing and market conditions, inquired of defendant Massey if the stock of United was for sale. According to this witness defendant Massey, 'didn't say it was, he didn't say it wasn't. He just showed me a balance sheet, a statement of conditions * * * we entered into a discussion of values' of the assets of United. No price was quoted or discussed at this meeting which was adjourned with comment by Mr. Taper, '* * * I will get in touch with you again'. Subsequently, a second meeting took place in July or August at which there were present defendant Massey, Mr. Taper, and the latter's attorney William Gilkbarg. At this meeting, according to the testimony of Attorney Gilkbarg, defendant Massey represented that the book value of United shares was $2,287.50 each. Attorney Gilkbarg suggested, 'it seems to me that the very most the thing is worth is a million and a quarter'. Defendant Massey inquired of his visitors as to whether they were prepared to make such an offer, although he did not consider the price adequate. On the day following this meeting, defendant Massey stated to Kline Dolan, a Vice President of United, that, 'Mr. Taper might consider making a million and a half dollars offer for the stock of the Association (United)'.

On September 18, 1952, Charles A. Anderson died intestate, leaving 20 surviving heirs consisting of sisters, brothers and their descendants. One of the surviving sisters was Mrs. Helen Schwartz, and at the time of her brother's death she resided in Springfield, Ohio, where she had lived 'nearly all my life'. Decedent Anderson's housekeeper informed appellant of the death of Mr. Anderson and suggested that appellant telephone decedent's sister Mrs. Schwartz because 'he seemed to depend upon her more than anyone else'. Appellant telephoned Mrs. Schwartz, and according to the latter's testimony, '* * * he asked me if I could come out here (to Los Angeles). He wanted us to fly; I asked him if it would be all right for me to bring my niece with me; and he said it would because I just couldn't make the trip by myself.' Arriving in Los Angeles on the following morning Mrs. Schwartz and her niece met appellant for the first time. After funeral arrangements had been completed appellant, Mrs. Schwartz, and her niece Mrs. Ell discussed the settlement of Anderson's affairs. According to the testimony of Mrs. Schwartz appellant said, '* * * would I be administrator. Well, I guess I didn't even answer him because I just didn't[151 Cal.App.2d 630] --i waS tired and i juSt wasn't even thinking, see. and then my niece spoke up and said that her brother lived here, Russell Hale, why couldn't he be appointed administrator.' Mrs. Ell testified that when appellant 'asked Mrs. Schwartz who she thought would be the one to settle up the estate; and I told him I thought my brother should since he was a resident of California * * * I...